Starbucks Corp reports 33.3% Net Income growth and almost no change in EBITDA Margin of 23.7%
29/10/2015 • About Starbucks Corp (
$4337) • By InTwits
Starbucks Corp reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Starbucks Corp is a growth stock: FY2015 revenue growth was 16.5%, 5 year revenue CAGR was 12.3% at FY2015 ROIC 51.4%
- EBITDA Margin is quite volatile: 23.7% in FY2015, 23.3% in FY2014, 2.2% in FY2013, 19.4% in FY2012, 19.5% in FY2011
- Starbucks Corp has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.5%. At the same time it's in pair with industry average of 6.6%.
- CAPEX is quite volatile: 349 in FY2015, 375 in FY2014, 919 in FY2013, 1,420 in FY2012, 1,436 in FY2011
- The company has highly profitable business model: ROIC is at 51.4%
- It operates with high leverage: Net Debt/EBITDA is 0.2x while industry average is -0.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Starbucks Corp ($4337) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 11,700 | 13,300 | 14,867 | 16,448 | 19,163 | 16.5% |
| Gross Profit | 3,190 | 3,568 | 4,198 | 4,951 | 5,964 | 20.5% |
| SG&A | 891 | 801 | 938 | 991 | 1,197 | 20.7% |
| EBITDA | 2,279 | 2,578 | 330 | 3,830 | 4,535 | 18.4% |
| Net Income | 1,246 | 1,384 | 8 | 2,068 | 2,757 | 33.3% |
Balance Sheet
|
|---|
| Cash | 1,148 | 1,189 | 2,576 | 1,708 | 1,530 | -10.4% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 550 | 550 | 1,299 | 2,048 | 2,348 | 14.6% |
Cash flow
|
|---|
| Capex | 532 | 856 | 1,151 | 1,161 | 1,304 | 12.3% |
Ratios
|
|---|
| Revenue growth | 9.3% | 13.7% | 11.8% | 10.6% | 16.5% | |
| EBITDA growth | 16.2% | 13.1% | -87.2% | 1,059.8% | 18.4% | |
| Gross Margin | 27.3% | 26.8% | 28.2% | 30.1% | 31.1% | 1.0% |
| EBITDA Margin | 19.5% | 19.4% | 2.2% | 23.3% | 23.7% | 0.4% |
| Net Income Margin | 10.6% | 10.4% | 0.1% | 12.6% | 14.4% | 1.8% |
| SG&A, % of revenue | 7.6% | 6.0% | 6.3% | 6.0% | 6.2% | 0.2% |
| CAPEX, % of revenue | 4.5% | 6.4% | 7.7% | 7.1% | 6.8% | -0.3% |
| ROIC | 36.4% | 36.4% | -6.0% | 52.8% | 51.4% | -1.4% |
| ROE | 30.9% | 29.2% | 0.2% | 42.4% | 49.7% | 7.3% |
| Net Debt/EBITDA | -0.3x | -0.2x | -3.9x | 0.1x | 0.2x | 0.1x |
Revenue and profitability
Starbucks Corp's Revenue surged on 16.5% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 19.5 pp from 4.8% to -14.7% in FY2015.
Gross Margin increased slightly on 1.0 pp from 30.1% to 31.1% in FY2015. SG&A as a % of Revenue showed almost no change in FY2015.
Net Income marign increased slightly on 1.8 pp from 12.6% to 14.4% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 6.8% in FY2015. The company showed almost no change in CAPEX/Revenue from FY2012 to FY2015. Average CAPEX/Revenue for the last three years was 7.2%.
Return on investment
The company operates at high and attractive ROIC (51.43%) and ROE (49.73%). ROIC decreased slightly on 1.4 pp from 52.8% to 51.4% in FY2015. ROE increased on 7.3 pp from 42.4% to 49.7% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.2x and Debt / EBITDA is 0.5x. Net Debt / EBITDA increased on 0.1x from 0.1x to 0.2x in FY2015. Debt surged on 14.6% in FY2015 while cash dropped on 10.4% in FY2015.
Appendix 1: Peers in Retail
Below we provide Starbucks Corp benchmarking against other companies in Retail industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Household Holdings Ltd ($692) | -87.0% | -32.8% | 5,357.9% | 76.2% | |
| Ming Fung Jewellery Group Ltd ($860) | 21.9% | 3.3% | -14.9% | 54.3% | |
| Merry Garden Holdings Ltd ($1237) | 53.9% | 37.1% | 12.8% | 47.6% | |
| Luk Fook Holdings International Ltd ($590) | | 47.2% | 12.6% | 43.3% | -17.1% |
| NewOcean Energy Holdings Ltd ($342) | 19.3% | 23.1% | 15.9% | 36.0% | |
| |
|---|
| Median (109 companies) | 21.9% | 10.0% | 5.9% | 2.8% | -4.6% |
|---|
| Starbucks Corp ($4337) | | 13.7% | 11.8% | 10.6% | 16.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Culture Landmark Investment Ltd ($674) | 77.5% | 91.1% | 99.4% | 99.5% | |
| Modern Beauty Salon Holdings Ltd ($919) | 97.3% | 97.4% | 95.9% | 96.8% | 96.7% |
| Vongroup Ltd ($318) | | | | 95.1% | 99.1% |
| Nanjing Sinolife United Co Ltd ($3332) | 80.6% | 86.5% | 89.3% | 90.9% | |
| Embry Holdings Ltd ($1388) | 82.3% | 81.2% | 80.4% | 82.3% | |
| |
|---|
| Median (98 companies) | 40.4% | 37.8% | 39.5% | 37.6% | 45.6% |
|---|
| Starbucks Corp ($4337) | 27.3% | 26.8% | 28.2% | 30.1% | 31.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Maoye International Holdings Ltd ($848) | 45.5% | 47.4% | 46.3% | 73.2% | |
| China Dongxiang Group Co Ltd ($3818) | 5.6% | 6.0% | 5.6% | 58.3% | |
| Nanjing Sinolife United Co Ltd ($3332) | 47.8% | 51.6% | 56.9% | 54.4% | |
| Lifestyle International Holdings Ltd ($1212) | 49.6% | 47.5% | 47.0% | 44.7% | |
| Golden Eagle Retail Group Ltd ($3308) | 52.1% | 48.5% | 47.3% | 42.8% | |
| |
|---|
| Median (109 companies) | 13.1% | 9.6% | 7.2% | 7.9% | 6.0% |
|---|
| Starbucks Corp ($4337) | 19.5% | 19.4% | 2.2% | 23.3% | 23.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Intime Retail Group Co Ltd ($1833) | 58.4% | 28.3% | 55.4% | 37.0% | |
| Future Bright Holdings Ltd ($703) | 6.2% | 2.6% | 3.7% | 36.8% | |
| Sage International Group Ltd ($8082) | 20.4% | 236.6% | 28.2% | 35.4% | |
| Maoye International Holdings Ltd ($848) | 30.9% | 32.8% | 24.1% | 31.5% | |
| Tsui Wah Holdings Ltd ($1314) | 5.2% | 8.3% | 9.3% | 30.5% | 10.6% |
| |
|---|
| Median (109 companies) | 3.8% | 4.0% | 3.6% | 3.4% | 2.4% |
|---|
| Starbucks Corp ($4337) | 4.5% | 6.4% | 7.7% | 7.1% | 6.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 48.1% | 50.7% | -4.6% | 81.3% | 71.8% |
| Sa Sa International Holdings Ltd ($178) | 45.7% | 53.5% | 52.7% | 49.0% | 39.8% |
| Coach Inc ($6388) | 82.0% | 82.3% | 68.7% | 45.0% | 20.8% |
| Nanjing Sinolife United Co Ltd ($3332) | 57.4% | 67.3% | 68.1% | 32.2% | |
| Bonjour Holdings Ltd ($653) | 83.7% | 69.1% | 65.5% | 30.9% | |
| |
|---|
| Median (109 companies) | 16.6% | 11.8% | 8.2% | 8.2% | 3.5% |
|---|
| Starbucks Corp ($4337) | 36.4% | 36.4% | -6.0% | 52.8% | 51.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sparkle Roll Group Ltd ($970) | -0.8x | 0.6x | 4.0x | 9.3x | 23.5x |
| China Yongda Automobiles Services Holdings Ltd ($3669) | 3.3x | 3.4x | 4.7x | 5.5x | |
| Zhongsheng Group Holdings Ltd ($881) | 2.2x | 4.6x | 4.5x | 5.3x | |
| NewOcean Energy Holdings Ltd ($342) | 35.2x | 6.2x | 6.1x | 5.3x | |
| Century Ginwa Retail Holdings Ltd ($162) | 6.5x | 2.0x | 2.5x | 4.8x | |
| |
|---|
| Median (85 companies) | -0.8x | -0.6x | -0.8x | -0.3x | -0.7x |
|---|
| Starbucks Corp ($4337) | -0.3x | -0.2x | -3.9x | 0.1x | 0.2x |
